Edition: International | Greek
MENU

Home » World

Inflation reaches lowest point in almost two years

Inflation in the U.S. cooled to the lowest point in almost two years in March as year-over-year price increases reached 5 percent

By: EBR - Posted: Thursday, April 20, 2023

While food prices overall remained unchanged from the previous month and food at home fell by 0.3 percent, energy prices decreased by as much as 3.5 percent over the same time period (and 6.4 percent year-over-year.)
While food prices overall remained unchanged from the previous month and food at home fell by 0.3 percent, energy prices decreased by as much as 3.5 percent over the same time period (and 6.4 percent year-over-year.)

by Katharina Buchholz*

Inflation in the U.S. cooled to the lowest point in almost two years in March as year-over-year price increases reached 5 percent. The last time a reading this low happened was May 2021. Compared to February, prices rose by a seasonally adjusted 0.1 percent - less than the month-on-month increases recorded in February and January. While food prices overall remained unchanged from the previous month and food at home fell by 0.3 percent, energy prices decreased by as much as 3.5 percent over the same time period (and 6.4 percent year-over-year.) However, some of the drop was offset by rising prices for housing, up by 0.6 percent since February and more than 8 percent since the same time last year.

In part due to the rise in housing cost, the core consumer price index reading (excluding food and energy) is now higher than the reading for all items. Food and energy are considered the more volatile items in the CPI - they rose fastest when inflation took off at the end of 2021, but are now also cooling faster, especially energy. At a press conference last month, Fed chairman Jerome Powell had made remarks that many took as a hint that the central bank’s tightening cycle might soon be over. With the current reading, at least one more rate hike is expected next month. “The process of getting inflation back down to 2 percent has a long way to go and is likely to be bumpy,” the central bank leader was quoted as saying then.

When inflation started spiking in the spring/early summer of 2021, it was largely due to the so-called base effect, reversing the pandemic’s cooling effect on consumer prices a year earlier. At the onset of the pandemic, prices had taken a dive due to a sudden drop in consumer spending and fuel demand before slowly climbing back to their pre-pandemic trajectory over the summer and fall. Due to that initial dip in consumer prices, year-over-year comparisons were exaggerated for a while, but that is no longer the case since the end of 2021. As of this month, the year-over-year figure is for the first time compared with a post-invasion inflation reading, meaning that inflation rates from now on out will appear lower as they are compared to prices that had spiked in the aftermath of the start of the war in Ukraine.

*Data Journalist, Statista
**first published in: Weforum.org

READ ALSO

EU Actually

Has Timmermans to climb down on his EU nature-restoration law proposal?

N. Peter KramerBy: N. Peter Kramer

EU Commissioner Frans Timmermans, one of the Vice-Presidents of the European Commission, is working on an ambitious law to help restore nature in the European Union

View 04/2021 2021 Digital edition

Magazine

Current Issue

04/2021 2021

View past issues
Subscribe
Advertise
Digital edition

Europe

Is it still crazy to talk of a ’European army’?

Is it still crazy to talk of a ’European army’?

The notion of a ‘European army’ has been around for years, although widely rejected as crazy and impractical

Business

Hirschman to the Rescue: How Political Should Companies Be?

Hirschman to the Rescue: How Political Should Companies Be?

Particularly in Europe, there is a widespread tendency among medium-sized companies to shy away from engaging in politics

MARKET INDICES

Powered by Investing.com
All contents © Copyright EMG Strategic Consulting Ltd. 1997-2023. All Rights Reserved   |   Home Page  |   Disclaimer  |   Website by Theratron